Question

A farmer wants to net at least $10,000/acre on the sale of his 80-acre property. If he allows for a total of 10% for commissions and closing costs, what should his listing price be per acre? Assume the farmer has no mortgage

Answer 1

$11,111.11

Explanation:

Net Money farmer wanted to get the on selling 1 acre = $10,000

Percentage of commission and closing cost incurred by him = 10%

out of 100 %, he will incur cost of 10%,

rest of them will be with him.

In percentage money he would have be = (100 - 10)% = 90%

Thus, 90 % will be net money he would have.

Let the list price be $x

Given that 90% of this $x will be with farmer which is equal to

90% of x = 90/100 * x = 0.9 x

It is given that he wants to net $10000

so 0.9x = $10,000

=> x = $10,000/0.9 = $11,111.11.

Listing price per acre should be at least $11,111.11.